IN THE SUPREME COURT OF THE STATE OF MONTANA Supreme Court Case No. DA 09-0131 On Appeal from the Montana Twenty-Second Judicial District Court, Big Horn County, the Honorable W. Blair Jones, Presiding NORTHERN CHEYENNE TRIBE, a federally recognized Indian tribe; TONGUE RIVER WATER USERS' ASSOCIATION; and NORTHERN PLAINS RESOURCE COUNCIL, INC. Plaintiffs and Appellants, v. MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY; RICHARD OPPER, in his official capacity as Director of the Montana Department of Environmental Quality; and FIDELITY EXPLORATION & PRODUCTION COMPANY, Defendants and Appellees. _____________________________________________________________ APPELLEE DEPARTMENT OF ENVIRONMENTAL QUALITY'S ANSWER BRIEF _____________________________________________________________ Claudia L. Massman Jack R. Tuholske Special Assistant Attorney General Tuholske Law Office, P.C. Montana Department of Environmental 234 East Pine Street Quality P.O. Box 7458 P.O. Box 200901 Missoula, Montana 59807 Helena, MT 59620-0901 Attorney for Northern Plains Tel. (406) 444-4222 Resource Council Fax: (406) 444-4386 [email protected]Attorney for Montana Department of Environmental Quality
Transcript
IN THE SUPREME COURT OF THE STATE OF MONTANA
Supreme Court Case No. DA 09-0131
On Appeal from the Montana Twenty-Second Judicial District Court, Big Horn
County, the Honorable W. Blair Jones, Presiding
NORTHERN CHEYENNE TRIBE, a federally recognized Indian tribe; TONGUE RIVER WATER USERS' ASSOCIATION; and NORTHERN
PLAINS RESOURCE COUNCIL, INC.
Plaintiffs and Appellants,
v.
MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY; RICHARD OPPER, in his official capacity as Director of the Montana
Department of Environmental Quality; and FIDELITY EXPLORATION & PRODUCTION COMPANY,
Claudia L. Massman Jack R. Tuholske Special Assistant Attorney General Tuholske Law Office, P.C. Montana Department of Environmental 234 East Pine Street Quality P.O. Box 7458 P.O. Box 200901 Missoula, Montana 59807 Helena, MT 59620-0901 Attorney for Northern Plains Tel. (406) 444-4222 Resource Council Fax: (406) 444-4386 [email protected] Attorney for Montana Department of Environmental Quality
John B. Arum Brenda Lindlief Hall Brian C. Gruber David K. W. Wilson Ziontz, Chestnut, Varnell, Reynolds, Motl & Sherwood, PLLP Berley & Slonim 401 North Last Chance Gulch 2101 4th Avenue #1230 Helena, Montana 59601 Seattle, WA 98121 Attorneys for Tongue River Water Attorneys for Northern Cheyenne Tribe Association Jon Metropoulos James L. Vogel Dana L. Hupp Vogel & Wald, PLLC Gough, Shanahan, Johnson & Waterman P.O. Box 525 33 South Last Chance Gulch Hardin, Montana 59034 P.O. Box 1715 Attorney for Northern Cheyenne Tribe Helena, Montana 59624-1715 Attorneys for Fidelity Exploration & Production Company
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TABLE OF CONTENTS Page
TABLE OF CONTENTS ........................................................................... i,ii
TABLE OF AUTHORITIES ............................................... iii,iv,v,vi,vii,viii
STATEMENT OF THE ISSUES ................................................................ 1
STATEMENT OF THE CASE.................................................................... 1
STATEMENT OF FACTS........................................................................... 2
I. Statutory Background................................................................. 2
A. The Clean Water Act ....................................................... 2
B. Technology-based Limitations ........................................ 4
C. Water Quality Standards.................................................. 6
D. Federal Antidegradation Policy ....................................... 7
E. Montana's Nondegradation Policy................................... 7
II. Administrative Proceedings ....................................................... 9
A. The 2003 Rulemaking...................................................... 9
B. The 2006 Rulemaking.................................................... 11
III. Fidelity's MPDES Permits ....................................................... 12
A. Renewed Permit No. MT 0030457................................ 12
B. New Permit No. MT 0030724 ....................................... 13
C. DEQ's Approval of Fidelity's Permits ........................... 13
STANDARD OF REVIEW ........................................................................ 15
SUMMARY OF ARGUMENT.................................................................. 16
ARGUMENT............................................................................................... 19 I. Fidelity's Permits Comply with the Clean Water Act and
Montana's Water Quality Act by Imposing Effluent Limits that Protect Water Quality............................................................... 19
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A. The CWA Does Not Mandate the Development of Technology-Based Limits by States When There Are No Federal Standards ................................... 20
B. States Permit Programs Approved by EPA under
402(b) of the CWA, Are Not Required to Have the Same Terms and Conditions as Federal Permits Issued Under 402(a) ............................................ 28
II. The 2003 Rule Complied with State and Federal
Nondegradation Policies ................................................ 32 III. The Permits Complied with MEPA............................... 40 A. The Alternatives Analysis in the EA Was
Adequate.............................................................. 41 B. The Analysis of the "No Action" Alternative Was
Adequate.............................................................. 44 CONCLUSION ........................................................................................... 46 CERTIFICATE OF COMPLIANCE ....................................................... 47 CERTIFICATE OF SERVICE ................................................................. 48
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TABLE OF AUTHORITIES CASES: American Wildlands v. Browner, 94 F.Supp.2d 1150, 1160 (D.Col. 2006) ............................................ 31 Arkansas v. Oklahoma, 503 U.S. 91, 101 (1992) ................................................... 2,17,28,30,39 Colorado Gas Compression Inc. v. Comm'r of Internal Revenue, 366 F.3d 863, 867 (10th Cir. 2004).................................................... 29 Columbus & Franklin County Metro. Park Dist. v. Shank, 600 N.E.2d 1042 (Ohio 1992) ............................................................ 38 E.I. Du Pont De Nemours & Co. v. Train, 430 U.S. 112, 129 (1976) ........................................................... 4,22,23 EPA v. State Water Resources Control Board (State Board), 426 U.S. 200, 204 (1976) ..................................................................... 6 Friends of the Wild Swan v. Dep't of Natural Resources, 2000 MT 209, ¶ 27, 301 Mont. 1, ¶ 27, 6 P.3d 972, ¶ 27 .................. 16 Friends of the Wild Swan v. Dep't of Natural Resources, 2005 MT 351, ¶ 6, 330 Mont. 186, ¶ 6, 127 P.3d 394, ¶ 6 ........... 16,20 Kentucky Waterways Alliance v. Johnson, 540 F.3d 466, 476 (6th Cir. 2008)...................................................... 33 Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 378 (1989) ................................................................... 16 Merlin Meyers Revocable Trust v. Yellowstone County (Merlin Meyers), 2002 MT 201, ¶¶ 22, 25, 311 Mont. 194, ¶¶ 22, 25, 53 P.2d 1268, ¶¶ 22, 25......................................................................................... 18,38
Montana Environmental Information Center (MEIC) v. DEQ, 1999 Mont. 248, 988 P.2d 1236 .................................................... 38,39 Natural Resources Defense Council (NRDC) v. EPA, 915 F.2d 1314, 1316 (9th Cir. 1990)................................................. 4,5 NRDC v. EPA, 859 F.2d 156, 200 (D.C. Cir. 1988) ...................................... 4,25,26,30 NRDC v. EPA, 863 F.2d 1420, 1424 (9th Cir. 1998)............................................... 5,21 Pennaco Energy Inc. v. BER, 2008 MT 425, ¶ 40, 347 Mont. 415, ¶ 40, 199 P.3d 191, ¶ 40 .......... 36 Printz v. United States, 521 U.S. 898, 925 (1997) ................................................................... 28 PUD No.1 of Jefferson City v. Washington Dep't of Ecology, 511 U.S. 700, 704 (1994) ............................................................... 2,3,5 Ravalli County Fish & Game Ass'n v. Mont. Dep't of State Lands, 273 Mont. 371, 377, 903 P.2d 1362, 1367 (1995) ............................. 41 Texas Oil & Gas Ass'n v. EPA (Texas Oil), 161 F.3d 923 (5th Cir. 1988) ......................................................... 25,26 Trustees for Alaska v. EPA, 749 F.2d 549, 553 (9th Cir. 1984)...................................................... 21 Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519, 551 (1978) ................................................................... 42 Washington v. EPA, 573 F.2d 583, 584 (9th Cir. 1978)................................................... 3,23
DEQ's Ex. 2.2 The BER proposed the rules "... to ensure that the designated
and existing uses of these waters for agricultural purposes will be protected
during the development of CBM currently being proposed in Montana." Id.
at 2273. As explained by BER, the proposed standards for Electrical
Conductivity (EC) and Sodium Adsorption Ratio (SAR) were intended to "...
provide a consistent and reliable method of developing MPDES permit limits
that will protect the designated uses of the affected waters." Id. at 2274.
The BER also proposed to adopt a nonsignificance criterion for EC
and SAR that applied a narrative threshold. Similar to the narrative criteria
in ARM 17.30.715(1)(g), which had previously been approved by EPA in
1999, the 2003 rule prohibited any "measurable effect" on existing uses and
any "measurable change" in aquatic life. ARM 17.30.760(6) (2003).
The BER explained that it had considered and rejected proposals 2 All of DEQ's Exhibits were submitted with its Motion for Summary Judgment.
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recommending a 10% threshold or designating EC and SAR as "harmful"
parameters. DEQ's Ex. 2 at 2278. The BER explained that numeric
thresholds for EC and SAR were not justified due to natural fluctuations of
water quality in the Tongue and Powder Rivers. Id. The BER reasoned that:
"Since the policy of 'maintaining' existing 'high quality' water will not prevent EC and SAR from naturally degrading to the point that standards are exceeded, the alternative of adopting rules that allow only de minimis changes in water quality is neither justified nor practical. Regardless of the treatment used by a particular discharger to prevent changes that exceed a de minimis threshold, the Tongue, Powder, and Little Powder rivers will naturally and unpredictably exceed any such criteria throughout the year. Furthermore, a de minimis requirement, such as 10% of the assimilative capacity, would be impossible to comply with and enforce."
Id.
The BER also rejected comments suggesting that both the WQS and
the narrative criteria for EC and SAR violated the Montana constitution and
would harm designated uses. MAR, Issue No 8, at 797, 798 (April, 24,
2003). DEQ's Ex. 3. The BER disagreed by stating that the standards and
the narrative criterion were being adopted for the specific purpose of
protecting existing uses. Since the nonsignificance rule categorically
prohibited any "measurable effect" to an existing use, no harm could result
to those uses. Id. at 798.
On August 28, 2003, EPA approved the BER's 2003 rules as being
consistent with the CWA and federal antidegradation policy. App. I.
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B. The 2006 Rulemaking
On May 17, 2005, a petition was filed with BER requesting it to adopt
rules that required treatment of all CBM water and designate EC and SAR as
"harmful" parameters.
On May 18, 2006, the BER amended the 2003 rule to designate EC
and SAR as "harmful," but declined to adopt the petitioners' request for rules
mandating treatment or reinjection of all CBM water. App. H. BER found
that the data purporting to demonstrate the technical feasibility of treatment
or reinjection was "inconclusive." Id. at 1262, 1263. Although BER agreed
to amend the 2003 rule, BER explained that its reasons for doing so were not
premised on the belief that the 2003 rule unlawfully exempted EC and SAR
from nondegradation review. Id. at 1247, 1248. The BER stated it was
amending the rule because it was "uncomfortable" with retaining a narrative
nonsignificance criterion for EC and SAR, which historically had been used
only for parameters that have no numeric WQS. Id. at 1251. In order to
achieve regulatory consistency, the BER designated EC and SAR as
"harmful" so that those parameters would be treated in the same manner as
all other parameters that have numeric WQS. Id.
In February 2008, EPA approved the 2006 "harmful" designation of
EC and SAR after noting that the change "simply makes application of
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nondegradation to EC and SAR consistent with Montana's statewide
approach." App. J at 4. EPA also noted that, during its review of the 2006
amendment, it had revisited the 2003 rule. Id. at 3. Based on its review,
EPA concluded that both the 2003 and 2006 nondegradation rules were
"within a range of options" considered by EPA to be consistent with the
federal antidegradation regulation at 40 CFR 131.12. App. J. at 3, 4.
III. Fidelity's MPDES Permits
A. Renewed Permit No. MT 0030457
In 2000, DEQ issued Permit No. MT 0030457 to Fidelity prior to the
adoption of numeric standards for EC and SAR. The permit authorized
discharges of untreated CBM water to the Tongue River at a maximum
allowed rate of 1,600 gallons per minute (gpm) from 16 outfalls. The permit
expired in 2002 but was administratively extended until a new permit could
be issued. Tribe's Exs. 26, 27.
After the BER adopted standards for EC and SAR, Fidelity filed
supplemental information to support its September 2001 application for a
renewed permit. DEQ's Ex. 7. The supplemental information analyzed the
maximum discharge rates that could be allowed without violating the new
standards for EC and SAR. Id. at 56, 57. Since instream concentrations of
EC and SAR are relatively low during high flow events, Fidelity proposed a
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series of discharge rates that allowed more discharge during high stream
flow events. Id. at 7, 56, 57. Based on the results of this analysis, Fidelity
proposed discharge rates allowing 14,000 gpm during the non-irrigation
season and 8,000 gpm during the irrigation season after demonstrating that
the standards for EC and SAR would be met at those rates. Id. at 57.
B. New Permit No. MT 0030724
In 2004, Fidelity applied for a new permit to discharge 1,700 gpm of
partially treated CBM water. DEQ's Ex. 8. Fidelity requested the new
permit to "assess the feasibility and costs of operating a full-scale treatment
system." Id. at 1. Fidelity proposed to blend the treated CBM water with
25% untreated water. By blending at this rate, the discharge would meet the
WQS for EC and SAR prior to being discharged into the Tongue River. Id.
at 2.
C. DEQ's Approval of Fidelity's Permits
In April 2005, DEQ issued a notice of its intent to grant Fidelity's
applications for a new and a renewed MPDES permit. Tribe's Exs. 32, 33.
DEQ requested comment on the draft permits, which were accompanied by
fact sheets supporting the permits, and an environmental assessment (EA).
Id. After two public hearings on the permits, public comment closed in June
2005. Id.
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During the comment period, DEQ received comments objecting to
any discharge that would "cause or contribute" to the impaired water quality
of the Tongue River near Miles City. Tribe's Ex. 32 at 6-7. For this reason,
DEQ delayed issuing the permits to conduct an additional analysis of
potential effects that the discharges might have on waters that were already
impaired by salinity. Id. At the conclusion of the analysis, DEQ issued the
permits in February 2006.
The final permit for the new discharge authorized one outfall of
treated CBM water at a rate of 1,700 gpm throughout the year. App. E. The
final permit for the renewed permit imposed flow rates that were
significantly lower than those proposed by Fidelity, which would have
allowed a maximum rate of 14,000 gpm in the winter and 8,000 gpm in the
summer. The final permit also imposed more restrictive flow rates than
originally proposed in the draft permit for March through June.
DEQ explained that, due to its recent finding that the lower reach of
the Tongue River was impaired for salinity, the agency had conducted an
analysis to determine whether the draft permits would "cause or contribute"
to the impairment. Tribe's Ex. 32 at 6. Baseline data collected by DEQ
indicated that the standards for EC and SAR were not being met at Miles
City during March through June. Id. at 7. In order to mitigate the
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impairment, DEQ reduced the flow rates in the renewed permit during those
months from 5,250 gpm to 2,375 gpm. Id. The flow rates for the remaining
year were restricted to 2,500 gpm during November through February and
1,600 gpm during July through October. App. C at 8.
The flow rates in the final permits implement water-quality-based
effluent limits (WQBELs) that were developed for parameters that had the
potential to exceed WQS, including the nonsignificance criteria in ARM
17.30.715. App. D at 4-13; App. F at 4-13. In the renewed permit,
WQBELs were developed for temperature, flow, total dissolved solids
(TDS), ammonia, and fluoride. App. D at 9. For the new permit, WQBELs
were developed for temperature, total nitrogen, flow, TDS, EC and SAR.
App. F at 9, 13. No WQBELs were developed for EC and SAR in the
renewed permit, because there was no potential that there would be
exceedances of the WQS and nonsignificance criteria for these parameters
due to the flow restrictions imposed in the permits. App. D at 13.
EPA did not object to or veto Fidelity's permits due to the lack of
technology-based limits when it submitted written comments on the draft
permits. DEQ's Ex. 12.
STANDARD OF REVIEW
In granting summary judgment, the District Court ruled, as a matter of
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law, that neither the CWA nor the WQA mandate the imposition of
technology-based limits using BPJ in state-issued permits. App. A at 18-19.
The District Court also ruled, as a matter of law, that DEQ's reliance on the
2003 nonsignificance rule complied with the state and federal
antidegradation policies. Id. at 25. Since there are no factual disputes, the
Supreme Court reviews the District Court's conclusions of law de novo,
determining their correctness. Friends of the Wild Swan v. Dep't of Natural
Courts have construed this language as providing EPA with the
discretion to impose technology-based limits, using BPJ, prior to the
adoption of federal standards. See NRDC v. EPA, 863 F.2d 1420, 1425 (9th
Cir. 1988) ("In the absence of national standards, the Act authorizes the
Administrator to issue permits on 'such conditions as the Administrator
determines are necessary to carry out the provisions of [the Act].'"); see also
Trustees for Alaska v. EPA, 749 F.2d 549, 553 (9th Cir. 1984).
Despite the plain language of 402(a)(1), the Tribe and Water Users
argue that 402(a)(1) is mandatory and applies equally to EPA and the states.
Tribe's Br. at 26; Water Users' Br. at 17. That same argument, however, was
3 Section 402(a)(1) is cited in EPA's regulations as the only authority for case-by-case effluent limits described in 40 CFR 122.44(a)(1) and 40 CFR 125.3(a)(2). See also, EPA's NPDES Permit Writers' Manual, which may be found at www.epa.gov/npdes/pubs, Chapter 5, § 5.1.4 ("The authority for BPJ is contained in Section 402(a)(1) of the CWA.").
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made and rejected in E.I. du Pont Nemours & Co. v. Train, 430 U.S. 112
(1976). In that case, industry argued that EPA had no authority to adopt
national standards under 301(b). Id. at 124. Rather, industry contended that
§ 402 of the CWA required state and federal permit writers to develop
technological standards for individual discharges. Id. As framed by the
Court, the issue of whether technology standards were to be promulgated as
rules or developed in permits on a case-by-case basis "... is tied to the
question of whether the Act requires the Administrator or the permit issuer
to establish the limitations." Id. at 128 (emphasis added).
In upholding EPA's authority to promulgate national standards under
301(b), the Court dismissed the contention that 402 provided the only
mechanism for establishing and enforcing technological limits. The Court
found that "... [402] does not mandate either the Administrator or the States
to use permits as the method of prescribing effluent limitations." Id. at 120
(emphasis added). Given the Court's construction of 402 as lacking any
mandate to develop technology-based limits in individual permits, the
Tribe's and Water Users' argument must fail. Nothing in 402(a) mandates
either EPA or the states to impose technology-based limits in individual
permits using BPJ when there are no national standards to apply.
Similarly, the argument that sections 301, 304, and 306 of the CWA
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mandate case-by-case promulgation of technological standards is not
supported by the plain language in those statutes. See e.g., Tribe's Br. at 33;
Water Users' Br. at 16, 17, 20-24 (citing 33 U.S.C. §§ 1311, 1314, 1316).
When construing those provisions, the U.S. Supreme Court concluded that,
"301 limitations are to be adopted by the Administrator, ... based primarily
on classes or categories, and ... take the form of regulation." Train, 430 U.S.
at 129. In turn, the 301 regulations rely on guidelines, promulgated by EPA
under 304, to determine the appropriate technology for the 301 regulations.
Id. at 131. Finally, 306 requires EPA to promulgate rules establishing
"Federal standards of performance" for new industries. 33 U.S.C. §
1316(b)(1)(B). In short, all of the technology-based provisions of the CWA
instruct EPA, not the states, to develop and promulgate national standards.
After reviewing the same statutes, the Ninth Circuit reached the same
conclusion. Washington v. EPA, 573 F.2d 583 (9th Cir. 1978). Similar to
the arguments made here, the Ninth Circuit rejected the contention that
301(b) required an ad hoc determination of technology standards using BPJ
in the absence of federally promulgated standards. Id. at 591. As explained
by the Ninth Circuit, "The express language of § 301(b) does not require ...
BPT [best practicable control technology] no matter how expressed or
determined. Rather, it calls for the achievement of 'effluent limitations ...
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which shall require the application of [BPT] as defined by the Administrator
pursuant to Section 304(b)of (the CWA) ....'" Id. (quoting 301(b)(1)(A))
Just as the CWA is bare of any express command requiring BPJ
limits, so are the federal regulations. For example, 40 CFR 125.3(a) states:
"Technology-based treatment requirements under section 301(b) represent
the minimum level of control that must be imposed in a permit issued under
section 402 of the Act." (emphasis added). Since 301(b) refers to
regulations promulgated by EPA, the "minimum level of control" specified
by the rule does not require BPJ limits for individual permits under 402(a).
Moreover, since the second sentence of the rule directs the permit writer to
other regulations for "additional or more stringent limitations," it is also
apparent that the minimum controls promulgated under 301(b) will not
always be required if a more stringent limitation applies.
For example, 40 CFR 125.3(a) directs the permit writer to 40 CFR
122.44 for other "more stringent limitations." Under subsection (d)(1) of
that rule, permit writers are to impose any "more stringent limitation"
necessary to achieve state water quality standards. 40 CFR 122.44(d)(1).
When there are no promulgated "minimum" standards to apply, 301(b)(1)(C)
and 40 CFR 125.3 support DEQ's position that achieving state water quality
standards is the "more stringent" limitation that must be imposed in permits.
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33 U.S.C. § 1311(b)(1)(C).
And while 40 CFR 122.44 begins by boldly declaring that "each
NPDES permit shall include" a laundry list of conditions, including BPJ
limits, those conditions "shall" be included only "when applicable." In
reading this regulation, the District Court correctly construed 40 CFR 122.44
to provide DEQ the discretion to determine that BPJ limits are not applicable
under the plain language of the rule. App. A at 19. First, the District Court
found that the technological standards under subsection (a)(1) of the rule
were not applicable, because there was no basis for establishing technology-
based limits pursuant to that subsection. Id. The District Court further
reasoned that, since there were no promulgated standards, and 402(a)(1) did
not command states to use BPJ, DEQ's reliance on water-quality based limits
to control Fidelity's discharge was consistent with the CWA. Id. at 19, 20.
Finally, none of the cases relied upon by the Tribe and Water Users in
district court and in this proceeding address the specific issue presented here
- i.e., whether 402(a)(1) mandates the development of technology-based
standards when no federal standards exist. As demonstrated below, Texas
Oil & Gas Ass'n v. EPA (Texas Oil), 161 F.3d 923 (5th Cir. 1988) and
NRDC v. EPA, 859 F.2d 156 (D.C. Cir. 1988), do not support the theory that
the exercise of BPJ under 402(a) is mandatory and applies equally to EPA
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and the states.
Texas Oil did not involve a dispute over BPJ limitations. Instead,
Texas Oil involved a dispute over technology-based standards promulgated
by EPA under 301(b), 304(b), and 306 of the CWA. Consequently, the only
issue before the court was whether the national standards met the
requirements of the CWA. Texas Oil, 161 F.3d at 927. The court's
explanation of how EPA's promulgated standards are enforced through
NPDES permits, including EPA's authority to impose and enforce BPJ
limits, is therefore merely dicta.
Similarly, NRDC involved a challenge to various rules promulgated
by EPA, including a rule authorizing EPA to veto state permits whenever
EPA determined that the state's BPJ limits were inadequate. NRDC, 859
F.2d at 181. Like Texas Oil, the issue before the court was not whether
402(a) mandated BPJ, but rather whether Congress intended EPA's veto
authority to extend to state permits that choose to impose BPJ limits. Id. at
181. Since the NRDC court did not squarely address the issue presented
here, its pronouncement that 402(a) requires BPJ is again only dicta. Read
in context, the D.C. Circuit was explaining that, if state permit writers
choose to exercise BPJ, they must follow the same statutory factors that EPA
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must adhere to when using BPJ under 402(a).4 Id. at 183.
The complete lack of any express statutory or regulatory mandate to
use BPJ is underscored by the Tribe's resort to EPA's guidance for support.
Tribe's Br. at 30, citing NPDES Permit Writer's Manual (Manual). But even
EPA's guidance fails to clearly say that BPJ is mandatory. Although the
Manual suggests that the "derivation" of technology-based limits is the first-
step in writing a permit, it is questionable whether deriving technological
standards includes developing technological standards using BPJ, as argued
by the Tribe. Other sections of the Manual suggest that "deriving"
technology-based limits requires permit writers to determine which
promulgated standard (i.e., ELG) applies. See, e.g., Manual, Chapter 5, p.
56 ("Derivation of effluent limits based on ELGs requires that the permit
writer have a general understanding of the ELGs for all industrial categories,
and detailed knowledge of the ELGs applicable to the permittee.")
Even when the Manual actually discusses BPJ, the guidance does not
say that BPJ is mandatory. Instead, EPA's guidance cautions permit writers
to clearly explain the need for BPJ limits in order to avoid challenges to the
permit limits. Id., p. 69. This cautionary advice strongly implies that the use 4 Similarly, the "comment" cited by the Tribe and the Water Users found in 40 CFR 125.3(c)(2)(ii) simply explains that, if BPJ is used, the statutory factors listed in the rule "must be considered in all cases, regardless of whether the permit is being issued by EPA or an approved State."
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of BPJ is not mandatory, but discretionary. In any event, since EPA's
guidance cannot substitute for an express statutory requirement to use BPJ,
the Manual fails to support Appellants' argument.
B. States Permit Programs Approved by EPA under 402(b) of the CWA, Are Not Required to Have the Same Terms and Conditions as Federal Permits Issued Under 402(a)
The Tribe's and Water Users' repeated assertion that DEQ "stands in
the shoes" of EPA so that DEQ's permits must be the same as EPA's ignores
the two distinct permit programs established by the CWA. Tribe's Br., 23,
24, 26, 27; Water Users' Br. 12, 19, 20. Moreover, if the CWA applies
"whole cloth" to states, as argued by Water Users, this imposition of federal
law would amount to an unconstitutional coercion of states prohibited by the
Tenth Amendment. See e.g., Printz v. United States, 521 U.S. 898, 925
(1997) ("... the Federal Government cannot compel States to implement, by
legislation or executive action, federal regulatory programs.").
As explained earlier, the "partnership" established by the CWA
anticipates separate roles for the state and federal government. Arkansas,
503 U.S. at 101. Under 402(a), Congress has directed EPA to issue federal
permits in compliance with 402(a)(1)-(5). 33 U.S.C. § 1342(a). In
distinction, Congress has allowed states to issue permits under the authority
of state law provided EPA approves the state program based upon a
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demonstration that state permits will meet the nine criteria under 402(b)(1)-
(9). Id. § 1342(b). Notably, although the 402(b) criteria require the
application of national technological standards in state permits, none of the
criteria require the application of technology-based limits using BPJ under
402(a)(1). See 33 U.S.C. § 1342(b)(1)(A) citing § 1311 (301) and § 1316
(306).
The omission of 402(a) from the list of specific CWA provisions that
are applicable to state programs under 402(b) indicates that Congress did not
intend to mandate the use of BPJ by states. As a matter of statutory
construction, when "Congress includes particular language in one section of
a statute but omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely in the disparate
inclusion or exclusion." Colorado Gas Compression Inc. v. Comm'r of
Moreover, there is no merit to the argument that 402(a)(3) requires
state permits to meet the same "minimum standards" as federal permits.
Tribe's Br. at 27. A plain reading of that provision results in the opposite
conclusion. Under 402(a)(3), federal permits issued by EPA "... shall be
subject to the same terms, conditions, and requirements" as state permits
issued under 402(b). 33 U.S.C. § 1342(a)(3). There is no reciprocal
29
requirement in Section 402(b). For this reason, the D.C. Circuit concluded
that the mandate in 402(a)(3) is a one way street - "This provision on its face
applies in only one direction: the federal program must meet specific
requirements set out in subsection (b), such as a five year fixed permit term
and incorporation of effluent limitations." NRDC, 859 F.2d at 176; see also,
Arkansas, 503 U.S. at 103 (Finding that, although federal permits are subject
to the "same terms, conditions, and requirements" of state permits, permits
issued by EPA must also comply with 401(a) of the CWA).
Given the separate and distinct state and federal permit programs
established by the CWA, the simple fact that Montana adopts by reference
EPA's regulations does not mean that the state is an agent of EPA or that it
must issue permits with the same conditions that EPA may choose to
impose. As discussed earlier, neither 402(a) of the CWA nor the federal
regulations mandate the use of BPJ, but provide permit writers the discretion
to use BPJ when deemed "applicable." In Montana, the permit writer's
discretion to impose BPJ is constrained by statute.
Under § 75-5-305(1), MCA, the Montana Legislature has granted the
BER the exclusive authority to adopt technology-based requirements for an
industry when there are no federal standards. In addition, except for the
technology-based standards promulgated by EPA, the statute prohibits the
30
imposition of technology-based limits on an individual discharge "... when
the discharge is considered nonsignificant under rules adopted ..." by BER.
§ 75-5-305(1), MCA.
Specifically, § 75-5-305(1), MCA, provides:
"... For cases in which the federal government has adopted technology-based treatment requirements for a particular industry or activity in 40 CFR, chapter I, subchapter N, the board shall adopt those requirements by reference. To the extent the federal government has not adopted minimum treatment requirements ... the board may do so through rulemaking ... ensuring that the requirements are cost-effective and economically, environmentally, and technologically feasible. Except for the technology-based treatment requirements set forth in 40 CFR, chapter I, subchapter N, minimum treatment may not be required to address the discharge of a parameter when the discharge is considered nonsignificant under rules adopted pursuant to 75-5-301."
Id. (emphasis added).
The above statute expressly grants BER the authority to adopt
technology-based standards for an industry and, by its exclusion, denies
DEQ the same authority. DEQ bases its interpretation on the maxim of
statutory construction that provides - "the inclusion of one is the exclusion of
the other." See American Wildlands v. Browner, 94 F.Supp.2d 1150, 1160
(D.Col. 2006) ("Where the law expressly describes a particular situation to
which it shall apply, an irrefutable inference must be drawn that what is
excluded was intended to be excluded.") Applying that maxim here, the law
authorizing BER to adopt technology-based standards for an industry in the
31
absence of federal standards establishes a Legislative intent that DEQ is
without authority to do the same.
Although the Tribe argues that DEQ is not precluded from using BPJ
since DEQ's authority to issue permits is independent from BER's
rulemaking authority (see Tribe's Br. 39), the last sentence in § 75-5-305(1),
MCA, applies to both DEQ and BER and clearly forbids the imposition of
technology-based limits whenever the discharge is nonsignificant.5 Since
Fidelity's discharges are nonisignificant under BER's rules, the statute
prohibits DEQ from imposing technological limits using BPJ. Consequently,
DEQ's reliance on water-quality-based limits to impose "more stringent"
limitations when no federal standard exists is reasonable and required by
301(b)(1)(C) of the CWA. 33 U.S.C. § 1311(b)(1)(C).
II. The 2003 Rule Complied with State and Federal Nondegradation Policies
Despite EPA's approval of the 2003 rule, the Tribe and Water Users'
strenuously assert that the rule constitutes a prima facie violation of the
CWA. Although Appellants clearly disagree with the rule, they have not 5 In testimony before the Senate Natural Resources Committee, DEQ's water quality specialist, Abe Horpestad, explained the meaning of the last sentence in § 75-5-305(1), as follows: "It also says if it is nonsignificant under the nondegradation rules, the department cannot require minimum treatment, except where required by the federal requirements." Page 21, Minutes, Senate Natural Resources Committe, February 18. 1995.
32
identified a single statutory or regulatory provision supporting their
argument. To say that all "exemptions from antidegradation review are
unlawful" (Water Users' Br., 35) and further assert that the 2003 rule "is less
stringent than required by federal law" (Tribe's Br., 36) assumes that EPA
has promulgated rules specifying implementation requirements for state
antidegradation policies. This assumption is incorrect.
The CWA's antidegradation policy is set forth in its entirety in 40
CFR 131.12. EPA interprets that regulation as providing states with "a great
deal of flexibility" in implementing Tier 2 requirements. See, EPA's
Advanced Notice of Proposed Rulemaking for Water Quality Standards
specifically rejected the notion that the 2003 rule was unlawful. DEQ's Ex.
5 at 1247, 1248. As explained by BER, the 2003 rule allowed DEQ to "...
impose any additional restrictions necessary to prevent a measurable change
to existing or anticipated uses" in addition to the restrictions in ARM
17.30.715. Id. For this reason, the BER concluded that the 2003 rule
properly implemented the state and federal antidegradation requirements.
Id.
The BER's conclusion that the 2003 rule, in combination with the
criteria in ARM 17.30.715, adequately protects high quality water is
supported by the de minimis increases of SAR and EC actually allowed
under the permits. The calculations in Appendix V in the Fact Sheet for
each permit show the actual increase above ambient concentrations in the
Tongue River resulting from the discharge. App. D and F.
In the new permit, the ambient in-stream concentration of SAR will
6 Similarly, EPA's approval letter of the 2006 rule also recognized that the amendment of the 2003 rule "simply makes application of nondegradation to EC and SAR consistent with Montana's statewide approach." App. J at 4.
36
increase from 0.60 to 0.76 during November through February as a result of
the discharge. App. F., Appendix V. Although the resulting concentration
of 0.76 represents a 26.7% increase of SAR above ambient conditions, it is
well below the standard of 5.0 for the non-irrigation season. See ARM
17.30.670(2)(a). The above change in ambient concentrations is a small
fraction of the change that would occur if the discharge were allowed up to
the standard of 5.0 - an 833% increase above ambient conditions. Since the
resulting concentration of 0.76 is only 15% of the standard, the water quality
of the Tongue River remains better than the standard, i.e., it remains "high
quality" in terms of SAR.
For EC, the new permit allows an increase in ambient concentrations
from 716 to 719 during November through February. App. F, Appendix V.
This is a 0.4% increase in the existing concentration of EC and is well below
the non-irrigation standard of 1,500. See ARM 17.30.670(2)(a). These
same nonsignificant changes occur in the irrigation season. For example,
from March through June, EC increases from 584 to 631 (an 8% increase)
and, during July through October, the ambient concentrations actually
decrease from 688 to 659 ( a 4% decrease). App. F, Appendix V. Since the
monthly irrigation season standard for EC is 1,000, the resulting
concentrations are well below the standard. ARM 17.30.670(3)(a).
37
Consequently, the permit maintains "high quality" water in terms of EC
throughout the year.
Although the renewed permit for untreated discharges allows more
increases of EC and SAR, the resulting concentrations in the Tongue River
throughout the year remain well below the numeric standards. App. D.
Consequently, there is no merit to the contention that the 2003 rule merely
protects the uses of water by allowing degradation up to the standards.
Appellants' reliance on Columbus & Franklin County Metro. Park
Dist. v. Shank, 600 N.E.2d 1042 (Ohio 1992) to argue that any degradation
is unlawful without Tier 2 review is misplaced. Unlike Montana, Ohio does
not provide exemptions for nonsignificant changes in water quality. Instead,
Ohio statues require Tier 2 review whenever there is any change, no matter
how small the effect. Shank, at 1055. For this reason, the Shank court's
interpretation of Ohio law has little relevance here.
Finally, the District Court correctly ruled that DEQ could not ignore
duly enacted statutes and regulations based upon an opinion that the laws are
not valid. App. A at 23, citing Merlin Meyers. The Appellants' contention
that the supremacy clause or the Montana Constitution requires a different
result should be rejected.
Unlike the water well tests in Montana Environmental Information
38
Center (MEIC) v. DEQ, 1999 Mont. 248, 988 P.2d 1236, Fidelity's
discharges are not categorically exempt from all review. Instead, DEQ
developed permit limits meeting all of the nonsignificance criteria in ARM
17.30.715 to ensure that the discharge caused only de minimis changes in
water quality. Consequently, there are no "significant impacts" that
implicate Montana's Constitution. MEIC, ¶ 79.
Finally, the Tribe's contention that the supremacy clause invalidates
the 2003 rule misapprehends the legal consequence of EPA's approval. As
explained in Arkansas, state standards that are approved by EPA "... are part
of the federal law of water pollution control" and are effectively
incorporated into federal law by EPA regulation as the "applicable"
standards. Arkansas, 503 U.S. at 110. EPA's regulations reflect the
Arkansas ruling by specifying that, once EPA approves a state water quality
standard, including its antidegradation policy, the standard becomes the
"applicable standard" for purposes of implementing the federal CWA. 40
CFR 131.21(c)-(e).
It is undisputed that, at the time the permits were issued, the 2003 rule
was the "applicable standard" under the CWA. The Tribe's argument that
the supremacy clause somehow invalidates the federally applicable rule
should be rejected.
39
III. The Permits Complied with MEPA
The Appellants' criticism of the alternatives in the EA fails to
acknowledge that the EA incorporated and "tiered from" a broad range of
alternatives in a Final Environmental Impact Statement (FEIS) for CBM
development prepared by the Bureau of Land Management (BLM), the
Montana Board of Oil and Gas Commission (BOGC), and DEQ. DEQ's Ex.
13 at 1-1. Their argument also ignores DEQ's statement in its Record of
Decision (ROD) for the FEIS explaining the agency's limited role in
selecting alternatives. Specifically, DEQ explained that its authority to
select alternatives for CBM activities was more limited than BLM's or
BOGC's, because DEQ's statutory authority over CBM development
extended only to ensure "... compliance with air and water quality
standards." DEQ's Ex. 15 at 13. Due to these statutory constraints, DEQ did
not select an alternative, but rather concurred in the selection of "Alternative
E" by the other agencies. Id.
In contrast, BLM's and BOGC's statutory authorities allowed those
agencies to select from a wide range of options for managing CBM water.
For example, the agencies' preferred "Alternative E" included various
management options such as using CBM water for beneficial uses, disposing
the water into impoundments, re-injecting it beneath the surface, or
40
discharging it to surface waters. DEQ's Ex. 13, at 2-13, 2-14. "Alternative
E" also included a requirement for the submission of detailed Plans of
Development (POD) and associated water management plans to BLM and
BOGC for approval prior to any decision to issue leases or drilling permits.
Id. at 2-13.
Ultimately, BLM and BOGC selected "Alternative E" in their
respective RODs, including the requirement for the agencies' approval of
PODs and water management plans prior to drilling. See e.g., DEQ's Ex. 14.
Notably, DEQ did not impose a similar requirement in its ROD, since it has
no authority under the WQA to dictate the manner in which a CBM
developer manages produced water. DEQ's Ex. 15.
A. The Alternatives Analysis in the EA Was Adequate
MEPA's requirement to take a "hard look" at impacts and consider
alternatives is "essentially procedural." Ravalli County Fish & Game Ass'n
v. Mont. Dep't of State Lands, 273 Mont. 371, 377, 903 P.2d 1362, 1367
(1995). Since it is procedural, MEPA does not change or augment the
statutory authority of an agency to "... withhold, deny, or impose conditions
on any permit ..." § 75-1-201(5)(a), MCA.
The MEPA procedure to consider alternatives in an EA is governed
by feasibility. As explained long ago, "To make an impact statement
41
something more than an exercise in frivolous boilerplate the concept of
alternatives must be bounded by some notion of feasibility." Vermont
Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435
U.S. 519, 551 (1978). According to that case, alternatives are not feasible,
and therefore do not need to be considered, if they are not presently
available due to statutory constraints. Id. MEPA's implementing
regulations contain the same concept of feasibility by instructing agencies to
consider only those alternatives in an EA that are "reasonably available and
prudent to consider." ARM 17.4.609(3)(f).
In district court, DEQ argued that the agency had no authority to
require treatment or re-injection pursuant to § 75-5-305(1), MCA, because
BER's authority to impose treatment under the statute indicated a legislative
intent that DEQ had no authority to do the same. Due to its lack of
authority, DEQ argued that treatment and reinjection did not need to be
considered in the EA, because those alternatives were not "reasonably
available or prudent to consider" under ARM 17.4.609(3)(f). After
upholding DEQ's interpretation of § 75-5-305(1), MCA, the District Court
held that MEPA did not require an analysis of treatment or reinjection, since
those alternatives were not "reasonably available" without a statutory
change. App. A. at 34. The Tribe and Water Users dispute this holding,
42
because they contend that the CWA and WQA require technology-based
limits, including treatment or reinjection.
As previously explained, neither the CWA nor the WQA mandates the
imposition of technological limits using BPJ. See Part A.1 infra. Moreover,
DEQ has no authority to impose technology-based treatment requirements
on individual permits. That is because DEQ interprets § 75-5-305(1), MCA,
as granting BER the exclusive authority to impose treatment to the exclusion
of DEQ. See Part A.2 infra.
Although the Tribe contends that the District Court incorrectly applied
a maxim of statutory construction that would preclude DEQ's exercise of
BPJ, the remaining text of subsection (1) in § 75-5-305, MCA, supports the
District Court's conclusion. That language provides that, except for the
technology-based treatment requirements promulgated by EPA, neither BER
nor DEQ may impose technology-based treatment limits on any discharge
that is considered nonsignificant under BER's rules. § 75-5-305(1), MCA.
Since Fidelity's discharges were determined to be nonsignificant, DEQ had
no authority to require treatment or reinjection when it issued the permits.
Consequently, the District Court's holding that MEPA did not require an
analysis of alternatives that were not "readily available" without a change in
statutes is correct.
43
B. The Analysis of the "No Action" Alternative Was Adequate
In district court the Tribe argued that DEQ's "no action" alternative
violated MEPA because it did not consider the impacts of a "project's
noncompletion" pursuant to § 75-1-201(1)(b)(iv)(C)(IV), MCA. The
District Court disagreed with the Tribe's interpretation of MEPA in two
ways: (1) the requirement to consider the impacts of a project's
noncompletion do not apply to an EA; and (2) since no cause existed to deny
the permits, the alternative of "noncompletion" was not "reasonably
available and prudent to consider." App. A at 35 (citing ARM
17.4.609(3)(f)).
The Tribe now contends that DEQ "implicitly" determined that an
analysis of a project's noncompletion was necessary, because it included a
"no action" alternative in the EA. See 75-1-201(1)(b)(i)(B), MCA. This
argument is not supported by the plain language of § 75-1-201(1)(b)(i)(B),
MCA, and the facts in the record. Under the plain language of that
provision, an EA does not need to consider the impacts of a "project's
noncompletion" pursuant to subsection (1)(b)(iv)(C)(IV), unless that
analysis is requested by the project sponsor or determined necessary by the
agency. § 75-1-201(1)(b)(i)(B). It is undisputed that DEQ's "no action"
alternative did not consider denying the permits, but rather proposed taking
44
no action to issue the permits. DEQ's inaction, however, would not result in
the termination of Fidelity's proposal to drill CBM wells. As explained in
the EA, despite DEQ's inaction - discharges from Fidelity's existing permit
would remain authorized and any excess CBM water could be impounded
away from surface waters. App. G at 13. Since DEQ's "no action"
alternative did not consider the impacts of denying the permits or Fidelity's
proposed activity, the facts do not support the Tribe's theory that DEQ
"implicitly determined" that analyzing the impacts of a project's
noncompletion under subsection (1)(b)(iv)(C)(IV) was necessary.
The Tribe also criticizes the court for applying an "unduly restrictive
interpretation" of DEQ's authority to deny Fidelity's permits under ARM
17.30.1363. A plain reading of that provision, however, supports the court's
conclusion.
ARM 17.30.1363 allows DEQ to deny or terminate a permit only for
the "causes" specified by the rule. Those "causes" include: (1) the permit
holder's noncompliance with an existing permit; (2) failure to disclose or
misrepresent relevant facts; (3) the discharge endangers human health or the
environment; or (4) a change in conditions at the permitted facility or a
permanent reduction of the discharge. Id. Since no cause to deny the
permits existed, DEQ had only two remaining choices under its MPDES
45
regulations: (1) issue the permits as drafted; or (2) modify the permits in
response to comments. See ARM 17.30.1377, 1378.
Although the Tribe argues that DEQ could have denied Fidelity's new
permit, because ARM 17.30.1363 applies only to renewed permits, there is
no principled reason or legal basis for DEQ to deny the new permit.
Contrary to the Tribe's assertion, delegated states are not required to deny a
permit based upon the discharger's failure to comply with federal standards
when EPA has failed to promulgate standards for the industry. Tribe's Br. at
with all of the requirements of the CWA incorporated into state rules, and
met all of the nonsignificance criteria applicable to the discharge, DEQ had
no authority to deny the permits. Consequently, the EA did not need to
consider the alternative of denying the permits, because that alternative was
not "reasonably available and prudent to consider." ARM 17.4.609(3)(f).
46
CONCLUSION
For all of the reasons given above, the Court should affirm the District
Court's judgment.
Respectfully submitted this _____ day of August, 2009.
________________________ Claudia L. Massman Special Assistant Attorney General Department of Environmental Quality
47
CERTIFICATE OF COMPLIANCE Pursuant to Rules 17 and 27 of the Montana Rules of Appellate
Procedure, as modified by Order dated June 28, 2000, I certify that this
Answer Brief of Appellee Montana Department of Environmental Quality is
printed with a proportionately spaced Times New Roman text typeface of 14
points and is double-spaced. The word count calculated by Word is 9,865
words excluding the Certificate of Compliance and Certificate of Service.
___________________________________
48
CERTIFICATE OF SERVICE I hereby certify that on the _____ day of August, 2009, I filed a true
and accurate copy of the foregoing APPELLEE DEPARTMENT OF
ENVIRONMENTAL QUALITY'S ANSWER BRIEF with the Clerk of the
Montana Supreme Court and that I served true and accurate copies upon
each attorney of record by first class mail, postage prepaid, addressed as
follows:
Brenda Lindlief Hall Jon Metropoulos David K. W. Wilson Dana L. Hupp Reynolds, Motl & Sherwood, PLLP Gough, Shanahan, Johnson 401 North Last Chance Gulch & Waterman Helena, Montana 59601 33 South Last Chance Gulch P.O. Box 1715 Jack Tuholske Helena, Montana 59624-1715 Tuholske Law Office, P.C. P.O. Box 7458 James L. Vogel Missoula, Montana 59807 Vogel & Wald, PLLC P.O. Box 525 John B. Arum Hardin, Montana 59034 Brian C. Gruber Ziontz, Chestnut, Varnell, Berley & Slonim 2101 4th Avenue #1230 Seattle, Washington 98121 ________________________________ Elois M. Johnson, Paralegal
